The lettings agents’ group Propertymark has told Chancellor Rishi Sunak that unless the private rented sector is overhauled many landlords will quit, rents will rise and there will be a drought of stock.
The organisation, in its formal submission to the Treasury ahead of Sunak’s Budget and spending review later this month, says the rental market is already falling behind on supply, with government policies set to make the situation worse.
The organisation says a recent Mortgage Works survey suggests that 20 per cent of landlords are likely to sell property in the next 12 months citing a combination of tax implications, tenant debt and a backlog in the courts as reasons behind the threatened exodus.
The trade body previously stated that for “most landlords, income from rent makes up 42 per cent of their total gross income, making them highly vulnerable when their tenants build up rent arrears.”
Propertymark says the effect on landlords has been compounded over the pandemic and official government figures show the proportion of private renters in arrears has tripled, from three per cent between April 2019 and March 2020 to nine per cent during November and December 2020.
The trade body warns that if the upward trend in this data continues the number of renters in arrears could reach almost 800,000 by the end of 2021.
Propertymark’s outgoing chief policy adviser Mark Hayward, says: “We are urging the government to look at the bigger picture here. It’s not about propping up landlords but more about doing the right thing for the country as we work to build back better from the devastating effects of the pandemic.”
He continues: “Ultimately the housing system needs to work for everyone, but landlords are being asked to carry too much of the financial burden caused by the pandemic. We are risking good landlords leaving the market.
“The private rented sector supports five million households in the UK and is an important provider of homes against a backdrop of an overwhelmed social housing system.
“However, at the moment, the risks associated with being a landlord are incredibly high and the financial help for tenants and landlords struggling under the weight of accumulated Covid-related debt is inadequate.”